Transcript Slide 1

Emerging Issues in Healthcare Fraud
August 31, 2009
Rebecca S. Busch, RN, MBA, CCM, CBM, CFE, FIALCP, FHFMA
CEO, Medical Business Associates
580 Oakmont Lane, Westmont IL 60559
www.medbizassociates.com
[email protected] 630.789.9000
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Agenda
 Fraud: key initiative in healthcare reform
 Global Perspective on Fraud & Fraud Concepts in
Healthcare
 Profiling Fraud
 Review Critical Schemes
 Review Latest Fraud Issues
 Who Gets Hurt?
 Trigger Points
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FRAUD – Technical Definition
 Misrepresentation of a material fact
consisting of a false representation,
concealment or non-disclosure;
 Knowledge of the falsity
 Intent to deceive and induce reliance;
 Justifiable and actual reliance on the
misrepresentation; and
 Resulting damages.
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FRAUD – On the front line
 “Things” or “Events” that hurt people
 Affecting ones person, home, family,
assets, and community
 Resulting in disability, financial
devastation, loss of loved ones, and death
 Leaving a person with a loss of faith,
hope, trust, and sense of identity
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WHY AN ISSUE?
 2 TRILLION DOLLAR Industry
 OIG ROI ON
AUDITS/INVESTIGTATION $17
TO $1
 Estimated that $60 billion
annually goes to fraud
Source: http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf
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OIG areas of concern
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Payments for unallowable services
Improper services not rendered
Improper claims submissions
Medicare reimbursement rates are too high for certain
services.
Payments for inadequately documented services
Manipulation of billing systems
Inaccurate wage data
Manipulative gaming through discharge or transfer of
patients to facilities for financial versus clinical reason.
Unreasonable and not medically necessary services
Source: http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf 6
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OIG Identified Vulnerabilities
 DME suppliers circumventing enrollment
and billing controls
 High levels of improper Medicare
payment for certain types of CME,
prosthetics, orthotics, and supplies
(DMEPOS);
 Inappropriate reimbursement rate for
certain DMEPOS.
Source: http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf
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5 Principals of Effective
Anti Fraud Activity
1. Scrutinize individuals and entities that want to participate as providers
and suppliers prior to their enrollment in health care programs.
2. Establish payment methodologies that are reasonable and responsive to
change in the market place.
3. Assist health care providers and supplier in adopting practices that
promote compliance with program requirements, including quality and
safety standards.
4. Vigilantly monitor the programs for evidence of fraud, waste, and abuse.
5. Respond swiftly to detected frauds, impose sufficient punishment to
deter others, and promptly remedy program vulnerabilities.
Source: http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf
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Global Perspective
 Primary Healthcare Continuum
 Secondary Healthcare
Continuum
 Information Continuum
 Consequence Continuum
 Transparency Continuum
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Primary Health Care Continuum (“P-HCC”):
Clinical, Service, Product, and Financial Integration
E-Health Data Driven Decisions
Plan
Sponsors:
Private
Insurance Plans
Government
Plan Sponsor:
Medicare;
Medicaid
Employer Plan
Sponsor
Office of
Personnel
Management
Sponsor
Payer’s
Payer’s:: Private
Private &
&
Public
Public
Vendors:
undisclosed
& disclosed
parties
Patients:
Insured
Employee
Provider’s:
Provider’s:
Hospitals
Hospitals
Professional
Professional Staff
Staff
Outpatient
Outpatient Care
Care
Office
Office based
based care
care
Home
Home based
based care
care
Third
Third Party
Party Vendors:
Vendors: Case
Case Managers;
Managers; legal
legal
system;
durable
medical
equipment;
drug
system; durable medical equipment; drug
manufacture;
manufacture; pharmaceuticals;
pharmaceuticals; transportation;
transportation;
labs;
labs; billing
billing agents;
agents; suppliers;
suppliers; etc.
etc.
Publicly
insured
Privately
insured
Gov.
Employee
Uninsured w
$
Uninsured
w/o $
White
White Collar
Collar &
& Organized
Organized Crime:
Crime: waste,
waste, fraud,
fraud, and
and abuse.
abuse.
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Segmented, Fragmented, Insulated, Lacks Service & Price Transparency 10
Secondary Health Care Continuum (“S-HCC”):
Privacy, Security, Confidentiality, and Integrity Integration
E-Health Data Driven Decisions
Public
Policy
Certifications
Standards
Financial
Case
Management
Cost
efficiency
Data
Data
Analytics
Analytics
“Interoperability
Functions”
Direct & Indirect
Health Information
Management
“Data Intelligence”
(“DI”)
Nationwide
Nationwide
Health
Health
Defense, Enforcement,
Information
Information
Research, Innovation,
Network
Network
Development, Change,
Growth
Data
Data
Repository
Repository
Public
Health
Patient/
Provider
Autonomy
Clinical
Case
Management
Quality
Safety
(Fraud
(Fraud Detection
Detection &
& Deterrence)…
Deterrence)…Organized
Organized Crime
Crime &
&
Terrorist
Terrorist Activity
Activity …(Bio-terrorism
…(Bio-terrorism detection
detection &
& Deterrence)
Deterrence)
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Segmented, Fragmented, Insulated, Lacks Interoperability & Optimal DI
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Information Continuum (“IC”):
Changes in Market & Industry Need
E- Interoperability Drivers: internet, intranet, and extranet systems
Electronics
Electronics
Computers
Computers
Data
output
Data
Creation,
Processing,
transformation
Components
Components
Industry
Industry
Data
input
Networking
Networking
Software,
Software,
languages
languages
Storage
Storage
Variable
Variable market
market offerings
offerings and
and applications:
applications: operating
operating system;
system; hardware;
hardware; software;
software;
change
change control;
control; physical
physical and
and system
system security.
security.
Segmented, Fragmented, Insulated, Non-par Application and Pace
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Consequence Continuum (“CC”):
Complications & Co morbidities
E- Interoperability Drivers: compatible internet, intranet, and extranet systems
Non-operability Drivers: incompatible, detached, electronic and paper systems
Financial &
Operational
Integrity:
Medical
Medical
Error
Error
Financial
Financial
Error
Error
HIP
ARP
OFA
PMA
Death
Death
Societal
Societal
implosion
implosion
Data
Creation,
Processing,
transformation
SMA
CMA
Business
Business Loss,
Loss,
Compromise,
Compromise,
Demise
Demise
Benefit
Benefit Loss,
Loss,
compromise
compromise
Health
Health
Integrity
Integrity
Economic
& Human
Integrity
Disability,
Disability,
compromise
compromise
Economic
Economic
Compromise/
Compromise/
Demise
Demise
Technology,
Technology, Innovation,
Innovation, Prevention,
Prevention, Deterrence,
Deterrence, Detection,
Detection, Investigation,
Investigation, Cost
Cost and
and
Recovery,
Recovery, Internal
Internal Controls,
Controls, Training
Training and
and Education
Education
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Employer, Patient, Payer, Provider, Vendor, Plan Sponsor, White Collar & Organized Crime Activity 13
Transparency Continuum (“TC”):
Corporate & Personal Disclosure
Transparency Drivers: social assumptions, laws, balanced disclosure
and privacy of personal and corporate transparency, limitations of
access due to technology, contractual or silent limitations.
Integrity of
Decision
Making:
Informal,
Informal, formal,
formal,
variable
market
variable market
rules
rules
Transparency
Progressive
Increase in
leverage of
one party over
the other
No
Transparency
Accuracy,
Accuracy, Quality,
Quality,
Integrity
Integrity &
&
Completeness
Completeness of
of
Data
Creation,
Data Creation,
Processing,
Processing,
Transformation
Transformation
Political
Political &
& Personal
Personal
&
Corporate
& Corporate Profit
Profit
Risk
Risk -- Level
Level of
of
threats
&
Exposure
threats & Exposure
Absolute Facts
Incontrovertible
Truth
Protection
Protection of
of
personal
privacy
personal privacy
rights,
rights, natural
natural
environment
environment
Level
Level of
of
proprietary
proprietary
rights
rights
Integrity
Integrity of
of
Decisions
Decisions
Level
Level of
of Choice
Choice
compromised
compromised
when
when info
info is
is
limited
limited
Market
Players:
Primary &
Secondary
healthcare
continuum.
Decision
making
based on
disclosed
parameters
Market
Market Tools:
Tools: Technology,
Technology, Innovation,
Innovation, Prevention,
Prevention, Deterrence,
Deterrence, Detection,
Detection,
Investigation,
Cost
and
Recovery,
Internal
Controls,
Training
and
Investigation, Cost and Recovery, Internal Controls, Training and Education
Education
Considerations: Employer, Patient, Payer, Provider, Vendor, Plan
Sponsor, White Collar & Organized Crime Activity
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Health Care Continuum (“HCC”): Follow the $ & PHI
Segmented, Fragmented, Insulated, Lacks Service & Price Transparency
Government
Plan Sponsor
Employer
Plan
Sponsor
**Office of
Personnel
Management
Sponsor
Payer’s:
Payer’s: Private
Private &
&
Public
Public
Patient:
Insured
Vendors:
undisclosed
& disclosed
parties
Provider’s:
Provider’s:
Hospitals
Hospitals
Professional
Professional Staff
Staff
Outpatient
Outpatient Care
Care
Office
Office based
based care
care
Home
Home based
based care
care
Others:
Others: Case
Case Managers;
Managers; JD’s;
JD’s; DME;
DME;
Drug
Drug Manufacture;
Manufacture; Phx;
Phx; Ancillary
Ancillary
Support;
Support; AMB;
AMB; Labs;
Labs; Billing
Billing Agents;
Agents;
Suppliers;
Suppliers; etc.
etc.
Employee
Gov.
Employee
Uninsured
w$
Uninsured
w/o $
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White Collar/ Organized Crime
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Healthcare Continuum
Plan Sponsors
Government
Private
Private and
and
Public
Public Payers
Payers
(TPA)
(TPA)
Patients
Insured
PBM
PBM
Employee
Employer
Office of
Personnel
Management
Broker
Broker
consulting
and
audit work
Pharmacy
Pharmacy
Gov. Employee
Solvent
Uninsured
Wholesaler
Wholesaler
Manufacturer
Manufacturer
Insolvent
Uninsured
White
White Collar
Collar and
and Organized
Organized Crime
Crime
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PBM Operational Pipeline Chart
Rx
Contracts
Yes
TPA
Contract
Health
Plan
Provides Rx benefits to a group, premium/cost payments to
the TPA. Recipient of applicable rebates
Broker
TPA
R
TPA collects funds from health plan, pays PBM, may be paid by PBM
for services
$
PBM provides payment to Pharmacy for drug costs, receives
price discounts for insured patients.
PBM
$
$
Pharmacy
$ - money exchange
D – Discounted Price
D
DP
DP- Discounted Product
R – Rebates
P- Product
Audits in the following areas:
HIP – Health information
audits; ARP- Accounts
Receivable & Fee schedule
Audits: OFA – operational flow
assessments & internal
controls
Provide benefit plan design, may be compensated by health plan, TPA, and or
PBM
$
P
Plan Sponsor
Contract
Recipient of Drug, premium payments to the health plan, cost
sharing by paying Pharmacy out of pocket
Insured
Patient
$
PBM
Contract
R
Provides discounts to PBM, receives payments
from PBM, provides drug to patient
Pharmaceutical
Wholesaler
$
Sell Products
Pharmaceutical
Manufacturer
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Decision Making Ladder for Pharmaceuticals
Durable Medical Equipment & Supplies; Research
Contractual
arrangements
FDA Approvals if applicable & regulatory
compliance & Licenses
Product Manufacture- foreign vs. domestic
(re) Packaging
Product (re) Distribution
primary wholesale
Product (re) Distribution
secondary wholesale
(re) Packaging
Product (re) Distribution – retail domestic & foreign:
Physicians…Pharmacies…Facility Based Care (licensed facility, pharmacists,
physicians)
Research, Regulatory/Gov Requirements, Compliance, Distribution, Packaging,
Wholesale, Retail: Requirements & Standards
Layered
Operational
flow activity,
complex
contracts $
flows, approved
relationships
Contemporaneous,
cyclical, recurring
activity – create
weak links
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ACCOUNTS RECEIVABLE PIPELINE:
Operational Flow Activity (OFA) (ILLICIT Market Activity)
Product Research
Marketing & Sales
misrepresentations
throughout
Waste,
fraud,
abuse
FDA & Regulatory
Approvals & Licenses
Product Manufacture- foreign vs. domestic
(re) Packaging
Product (re) Distribution
primary wholesale
Product (re) Distribution
secondary wholesale
(re) Packaging
Product (re) Distribution – retail domestic & foreign:
Physicians…Pharmacies…Facility Based Care
(licensed facility, pharmacists, physicians)
Research, Regulatory/Gov Requirements, Compliance,
Distribution, Packaging, Wholesale, Retail, Marketing
& Sales: Requirements & Standards
Manipulations
of product &
pricing; illicit
distributions;
introduction
of altered
products,
counterfeit
False Research;
unlicensed;
noncompliance
Medically
unnecessary
distribution
Benefit Plan
Manipulations;
false claims;
vendor,
employee,
corporate fraud;
organized
19 crime;
kickbacks
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Follow HIP & PHI & $ & HCC: What is the DATA
ABERRATION & INTERNAL AUDIT CONTROL ISSUE?
What type of
Patient?
Insured
Employee
Gov. Employee
Uninsured w $
What type of Providers?
Hospital,
OPS,
MD Office,
Nursing Home,
Other:
RX, DME,
Uninsured w/o $
Who is funding
the plan?
Gov. Plan
Premium based
Payer
What type of Payer?
Other Parties?
TPA
TPA/Premium
GPO, HMO, PBM,
Retail Chain,
Distributor,
End Customers,
Manufacture
Other
Self funded
employer
Who….What….How….Why…..Where…..When
Data & Documents
Source
Observations & Interviews
Predication
Analytics: $ & Operational
Audit Theory
SOAP: Patient Information
Investigation & Report
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Table 13: INTERNAL AUDIT PROFILER
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Anomaly Data Analysis Profiler
Fraud Issues
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
Medical Identity Theft
Illicit Provider Rx Sales
Illicit Internet Rx Sales
Drug Diversion, Adulterated Drugs
Counterfeit Drug Activity
Theft of limited Resources
(medically unnecessary services)
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Fraud Issues
Vulnerable Patients – Neglect & Abuse
Patient Experimentation
Off Label Medication Use
Provider False Claim
Foreign Nationals Shopping Health
Dollars in US
 Vendor/TPA Fraud





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Medical Identity Theft
 MIT is the theft of IIHI for the purpose of
misrepresentation of health information to obtain
access to property or permanently deprive or harm an
individual while interacting within the healthcare
continuum. Use of an individual’s identity outside the
healthcare continuum is considered identity theft.
 When a perpetrator steals all or part of the IIHI
elements from a medical record file to open up a credit
card account and go on a shopping spree, it is
considered identity theft—not medical identity theft.
The differentiating factor for medical identity theft is
that the stolen information is used for illegal gains
within the healthcare domain
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Illicit Prescription Activity
 Counterfeit Drugs
 Adulterated Drugs
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Target Drugs

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
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Antibiotics, vaccines
Antimalarials
Hormones
Steroids.
Anticancer
Antiviral drugs
Transplant rejection drugs
Anything else available
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Sample: Procrit
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Sample: Procrit
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Sample: Ponstan
Although similar in appearance to the
authentic tablets, the counterfeit Ponstan
tablet on the left contains no active
ingredient. Instead, it is composed of
boric acid, brick dust and paint. Boric
Acid is a pesticide that can cause
gastrointestinal and renal failure.
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The counterfeit Lipitor tablets on the
left are nearly identical from the
authentic tablets on the right. Only
distinguishable to the consumer by
their bitter taste, the counterfeit
tablets were among more than 18
million counterfeit Lipitor tablets
removed from the U.S. supply chain
in 2003. Columbian authorities
raided this manufacturing site where
they found more than 800,000
counterfeit Ponstan tablets, as well as
large quantities of Terramycin,
packaging for both products,
and manufacturing equipment.
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Sample: Viagra
This is a Viagra counterfeiting site in Egypt. Counterfeit tablets were being given
their blue coloring using an old cement mixer. Clearly, the manufacturing conditions
were far from sterile.
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This an old cement mixer
used to give counterfeit
Viagra tablets their blue
coloring.
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Counterfeit One Touch
Basic/Profile Test Strips
 Counterfeit One Touch Basic/Profile Test Strips,
lot numbers 272894A, 2619932, and 2606340
 Lot Numbers 272894A, 2619932, or 2606340
appears on the outer carton and on the inside
container (vial).
 The outer carton is written in Multiple Languages
including English, Greek and Portuguese.
 The outer carton is labeled as 50-Count One
Touch (Basic/Profile)Test Strip packages
 The bottom of the outer carton does not include
an NDC number.
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What Else?....Rx Providers

“JORGE A. MARTINEZ, M.D. (CLEVELAND):
This investigation resulted in the first known prosecution involving
a criminal charge of Health Care Fraud resulting in death.

The case focused on the illegal distribution of pharmaceutical
narcotics and billing for unnecessary medical procedures.

The investigation revealed that Dr. Martinez provided excessive
narcotic prescriptions, including Oxycontin, to patients in
exchange for the patients enduring unnecessary nerve block
injections. Dr. Martinez’ actions directly resulted in the death of
two of his patients. From 1998 until his arrest in 2004, Martinez
submitted more than $59 million in claims to Medicare, Medicaid,
and the Ohio Bureau of Worker's Compensation.
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What Else?....Rx Providers

In January 2006, a jury found Martinez guilty of 56
criminal counts, including distribution of controlled
substances, mail fraud, wire fraud, Health Care
Fraud, and Health Care Fraud resulting in death.
Martinez was later sentenced to life in prison.

This investigation was conducted jointly with the
HHS-OIG, Ohio Bureau of Workers Compensation,
DEA Diversion, AdvanceMed, Ohio Department of Job
and Family Services, Anthem Blue Cross Blue Shield
and Medical Mutual of Ohio.”[1]
[1]
http://www.fbi.gov/publications/financial/fcs_report2
006/financial_crime_2006.htm
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What Else?...Drugs

BANSAL ORGANIZATION (PHILADELPHIA):
This investigation was conducted jointly with the DEA
and IRS and was focused on a Philadelphia-based
Internet pharmacy drug distributor which was
smuggling drugs into the U.S. from India and selling
them over the Internet.

The criminal organization shipped several thousand
packages per week to individuals around the country.
In April 2005, 24 individuals were indicted on charges
of distributing controlled substances, importing
controlled substances, involvement in a continuing
criminal enterprise, introducing misbranded drugs into
interstate commerce, and participating in money
laundering. Over $8 million has been seized to date as
a result of the charges.
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What Else?...Drugs

As of December 1, 2006, 12 suspects have pled
guilty, three have been convicted at trial, four are
in foreign custody, and five remain fugitives. This
investigation was worked jointly with the DEA, IRS,
ICE, USPIS, and the Lower Merion Police
Department. I]
[i]
http://www.fbi.gov/publications/financial/fcs_report
2006/financial_crime_2006.htm.
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Dangerous Doses
 Operation Stone Cold Florida counterfeit ring
 Ring charged with trafficking in bad medicine –
indicted in 2003 on charges of racketeering,
conspiracy to commit racketeering, organized
scheme to defraud, grand theft, dealing in
stolen property, sale or delivery of a
controlled substance, possession with intent to
sell prescription drugs, sale and delivery of a
controlled substance and purchase or receipt
of a prescription drug from an authorized
person.
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Perpetrators







Michael Carlow – ex-convict
Candace Carlow, wife
Thomas Atkins, brother in law
Marilyn Atkins, mother in law
Jose L. Benitez, business partner
14 other parties
$42 million dollar enterprise
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Profile of one victim
Timothy Fagan
16 years of age
Receive a successful live transplant
Mom injecting Epogen at home once per
week
 Timothy experienced excruciating pain
 Mom checks in with Doc – receives notice
of counterfeit Epogen




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How did this happen?
 Investigation found that no
chain of custody exists once
the drug leaves the
manufacturer.
 Drugs lost in the secondary
wholesaler market
 Anyone can apply for a license
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Amgen
Drugmaker
2,000 U/ml
Manufacturer
Cardinal
8,931 boxes
2,000 U/ml
National Wholesaler
--- probable sales
∙∙∙ unknown sources and sales
→ confirmed sales
AmerisourceBergen
3,363 boxes
2,000 U/ml
J& M Pharmacare
FL Pharmacy
Bought 12,294 boxes
2,000 U/ml
Gray Market
Armando Rodriguez
FL Go-Between
12,294 boxes
2,000 U/ml
Silvino Morales
Relabeled Vials
Costal Medical
VA Wholesaler
135 Boxes
Lot 2970
Printer in Hialeah
Made Counterfeit
Labels
Jose Grillo
Alleged FL Counterfeiter
2,000 U/ml → 40,000 U/ml
Tradewinds Trading
TX Wholesaler
135 boxes
Lot 2970
Rebel Dist
CA
Wholesaler
Grapevine
Trading
OH Wholesaler
Ivan Villarchao
FL
45 Boxes
Lot 2970
Optia Medical
Mark Novosel
UT Shell Co.
45 Boxes
Lot 2970
AD Pharmaceutical
FL Wholesaler
2 boxes
Lot 2970
Armin Medical
NH Wholesaler
129 Boxes
Lot 2970
Express RX
Eddie Mor
TX Shell Co.
180 Boxes Lot 2970
Dialysist West
AZ Wholesaler
1056 Boxes, Lot 2970
Pharmacy
Patient
Medix Intl
Carlos Luis
TX Shell Co.
180 Boxes Lot 2970
AmeRx
Susan Cavalieri
FL Wholesaler
182 Boxes
Lot 2970
Jemco Medical
FL Wholesaler
16 Boxes
Lot 2970
Regional Wholesaler
National Wholesaler
Double J
Unlicensed FL
Wholesaler
Playpen South
FL Strip Club
Nick Just/Paul Perito
CSG
TN Wholesaler
812 Boxes
Lot 2970
Y W Consultants
Unlicensed FL
Wholesaler
Premier Medical Group
GA Shell Co.
460 Boxes Lot 1091
812 Boxes Lot 2970
CSG
TN Wholesaler
460 Boxes
Lot 1091
Dialysist West
AZ Wholesaler
461 Boxes, Lot 1091
AmerisourceBergen KY Distribution Center
1517 Boxes
CVS, NY
Timothy Fagen
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Jury Convicts Miami Physician and Nurse
of $11 Million HIV Infusion Medicare
Fraud
 Miami physician Ana Alvarez-Jacinto, 54, and
nurse Sandra Mateos, 43, were found guilty by a
Miami jury for their roles in an $11 million
HIV/AIDS infusion fraud scheme.
 Evidence at trial established that both defendants
worked at Saint Jude Rehab Center Inc. ( St. Jude
), a clinic that purported to specialize in treating
HIV/AIDS patients. St. Jude was operated and
owned by indicted fugitives Carlos Benitez and
Luis Benitez, and managed by convicted coconspirators Aisa Perera and Mariela Rodriguez.
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Jury Convicts Miami Physician and Nurse
of $11 Million HIV Infusion Medicare
Fraud
 Evidence at trial proved that between June and
November 2003, Alvarez-Jacinto, with the
assistance Mateos, ordered hundreds of medically
unnecessary HIV infusion treatments at the clinic.
 Evidence at trial also established that HIV-positive
Medicare patients were brought to the clinic by
Carlos and Luis Benitez for the purpose of getting
cash payments in exchange for allowing the clinic
to bill for unnecessary treatments.
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Jury Convicts Miami Physician and Nurse
of $11 Million HIV Infusion Medicare
Fraud
 Testimony at trial revealed that defendant
Mateos and other co-conspirators paid the
patients cash kickbacks of approximately $150
per visit.
 After patients had been paid, they agreed to
allow Alvarez-Jacinto and her co-conspirators
to prescribe, and sometimes administer,
unnecessary infusion treatments.
 According to testimony at trial, St. Jude then
billed Medicare for approximately $11 million
for the unnecessary services. For those claims,
Medicare paid more than $8 million to St. Jude.
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WHO GETS HURT?
 HIV (Human immunodeficiency virus)
primarily infects vital cells in the
human immune system
 AIDS (Acquired immune deficiency
syndrome) the progression of disease
 These individuals mostly die from
opportunistic infections or malignancies
associated with the progressive failure
of the immune system
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WHO GETS HURT?
 The aim of antiretroviral treatment is
to keep the amount of HIV in the
body at a low level. This stops any
weakening of the immune system
and allows it to recover from any
damage that HIV might have caused
already.
 AIDS can attack cells in the immune
system for example Platelets: Cells
that help the blood to clot.
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WHO GETS HURT?




$11 million dollars stolen
$1,000 per infusion
11,000 patients (2.3%)
At the end of 2007, the estimated
number of persons living with AIDS
in the United States and dependent
areas was 468,578
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March 2009 Arrest in Florida
 Two Miami-area residents pleaded
guilty today in connection with a
$10 million Medicare fraud scheme
involving HIV infusion clinics
 $11 million dollars stolen
 $1,000 per infusion
 10,000 patients
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March 2009 Arrest in Florida
 To make it appear that the patients
actually had low platelet levels, Del
Cueto admitted that she and her coconspirators used chemists, including
Dagnesses, to manipulate the blood
samples drawn from Midway's patients
before the blood was sent to a
laboratory for analysis.
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More IV infusion Cases
 November 2004, brothers Carlos and Luis
Benitez conspired to submit about $110
million in false claims to the Medicare
program for HIV infusion services. 110,000
patients neglected
 Garcia faces a maximum of 85 years in
prison. Freire faces a maximum of 65
years in prison if convicted on all charges
for $56 million. 56,000 patients neglected.
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The Numbers Tell the Story
 Just 4 Cases Alone
 187,000 Patients
 40% of Patient Living in the US
with HIV/AIDS
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Trigger Points: DATA
 Data – Volume of claims by provider
 Reconciliation of infusion claims with
laboratory tests, CMS-1500 Data, UB-92
Data
 Address association, vendor trending,
billing agent trending, supply trending
 Clinical data analysis
 CDC Statistics on Occurrences
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Nursing Home Owner Convicted in
Bedpan Death
 February 2009 The owner of a nursing home in
Albuquerque, New Mexico, has been found guilty of
felony abuse and neglect in connection to charges
stemming from an incident on Christmas day in
2005.
 As reported by Andrews Publications, Richard
Gerhardt, a 76-year-old resident at the nursing
home, who was recovering from a broken hip, was
placed on a bed pan and left there for 24 hours.
 According to reports, the bedpan became imbedded
in his skin, causing an open wound that became
infected and resulted in his death 5 days later.
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Who Gets Hurt?
 Vulnerable population – Elderly
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The Number Tells the Story
 In 2004, about 159,000 current U.S.
nursing home residents (11%) had
pressure ulcers. Stage 2 pressure ulcers
were the most common. (CDC)
 15,281 Nursing Homes in US
 1,368,230 Nursing Home residents
 92.3% with deficiencies
 9.7% with no deficiencies
 17.6% with serious deficiencies
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Trigger Points: Top 10 Issues





Accident Environment 37%
Food Sanitation 35%
Quality of Care 29%
Professional Standards 28%
Comprehensive Care Plans 22%
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Trigger Points: Top 10 Issues





Housekeeping 20%
Incontinence/Urinary Care19%
Pressure Sores19%
Unnecessary Drugs19%
Infection Control18%
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Doctor experimented on patients,
suit alleges February 2009





A whistleblower complaint accuses former osteopathic surgeon
Dr. John A. King of experimenting on 26 of his patients.
The federal complaint says King used medical devices in ways
that hadn't been approved by the FDA and received illegal
kickbacks for doing it.
"King and David McNair [King's physician assistant] were
conducting clinical research and human patient experimentation
when they performed the anterior lumbar inter-body fusions" on
eight patients, the "qui tam," or whistleblower, complaint states.
"King and McNair took studies that failed in laboratory animals,
and then, without any reasonable basis to conclude that they
would be successful, began to experiment on humans," the
complaint says.
King generated 124 medical malpractice lawsuits during his short
tenure at Putnam General Hospital between November 2002 and
June 2003.
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Doctor experimented on patients,
suit alleges February 2009
 He's lost his medical license in numerous
states, including West Virginia. Putnam
General's former owner, Hospital Corporation
of America, has paid out approximately $100
million to settle King-generated lawsuits.
 These new charges against King are
contained in a previously sealed whistleblower
complaint filed against EBI Inc. on May 12,
2006, in federal court in Charleston.
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Doctor experimented on patients,
suit alleges February 2009



Along with King and McNair, the complaint targets two
companies:
Wright Medical Technology Inc. based in Arlington,
Tenn., made Allomatrix, a bone fusion material that
failed to work properly during two experimental
studies performed on rats and rabbits. A third study,
using pig-tailed macaques, rare primates native to
Southeast Asia, showed "questionable" benefits.
EBI Inc., a subsidiary of Biomet Inc. in Parsippany,
N.J., made spine stimulating devices King used during
his surgeries. EBI allegedly paid King a bonus each
time he inserted one of their "Ionic Spacers" into a
patient's spine.
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Doctor experimented on patients,
suit alleges February 2009
 No consent, no review
 According to the complaint, King and McNair
undertook deliberate, well-planned experiments
on these patients.
 For example, they allegedly made sure half the
patients were male and half female. They
implanted 12 patients with one type of device,
and 14 patients with another.
 Despite this, patients say they were never
informed they would receive an experimental
device.
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Doctor experimented on patients,
suit alleges February 2009





"If any patients were to have been participants by design in
an experimental protocol such as that conducted by King and
McNair, appropriate informed consents would have to have
been obtained from the patients," the complaint states.
There is no evidence patients were asked to sign a consent
form.
"Additionally, institutional review board approval would have
had to have been granted by the hospital where the clinical
study was undertaken" and all procedures "approved by the
research committee of the medical center."
Those procedures were never followed at Putnam General.
EBI was fully aware of what King was doing at that time, the
qui tam complaint alleges.
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Who Gets Hurt?
 The Patient 30 Plus people and their
families
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Trigger Points
 Data Statistical Sampling of Occurrence
 Data – Volume of claims by provider
 Reconciliation of infusion claims with
laboratory tests, CMS-1500 Data, UB-92 Data
 Address association, vendor trending, billing
agent trending, supply trending
 Clinical data analysis
 Key Patient Documents: Patient
Consent Forms
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$425 Million Cephalon Civil
Settlement and Criminal Fine;
 In America's Largest
Biotechnology Medicaid Fraud Case;
Qui Tam Whistleblower
 Attorney Brian P. Kenney, Esq. Filed
First Complaint With Client's Off-Label
Marketing Allegations In 2003;
 $375 Million Civil Settlement, $50
Million Corporate Criminal Fine Today
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$425 Million Cephalon Civil
Settlement and Criminal Fine

Many Schemes:

Intensively marketing Actiq (contains fentanyl, an opioid agonist and a
Schedule II controlled substance) to physical medicine and rehabilitation,
and pain management specialists;

Encouraging sales reps to make false statements about the efficacy of
Gabatril, and providing dosing recommendations when none have been
determined for depression;

Leaving "huge doses of Gabatril" with psychiatrists when no approved use
or dosage existed for psychiatrists;

Encouraging sales representatives to recruit psychiatrists by paying the
physicians honoraria in return for recommending Gabatril to other
psychiatrists; and

Assisting physicians in securing Medicaid reimbursement for Actiq when
off-label use was ineligible for Medicaid payment.
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Who Gets Hurt?
 Studies have shown the off label use can
generate more adverse drug reactions
 Significant number of studies in off label use
with children – specifically psychotropic
medications
 Market Dilemma: The FDA has stated,1 and the
American Medical Association agrees,2 that
physicians are free to prescribe approved drugs
for any scientifically supported use, whether onor off-label.
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Trigger Points
 Scientifically valid studies
 Marketing materials
 CDC occurrence analysis by diagnosis
and prescription medication
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69
Worldwide injunction granted
against American living in B.C.
 Thursday, October 23, 2008
Vancouver - A B.C. Supreme Court
judge has granted a worldwide
injunction to freeze the cash and
assets of an American man who has
been living in Vancouver for two
years and is wanted in the U.S. for
a $54-million US Medicare fraud.
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Worldwide injunction granted
against American living in B.C.
 Peter G. Rogan, 62, formerly of Valparaiso,
Ind., was detained May 25 by the Canada
Border Services Agency when returning to
Vancouver from a trip to China.
 Paula Faber of the Immigration and Refugee
Board in Vancouver said Rogan was
detained by the CBSA for "serious
criminality" but was released June 3 on
terms and conditions after an IRB hearing.
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Worldwide injunction granted
against American living in B.C.
 Rogan sold Edgewater Hospital but continued
to control it and medical center through
various management companies he owned,
U.S. authorities say.
 The hospital closed in December 2001 and
entered bankruptcy in 2002, when four
doctors, a vice president and the
management company pleaded guilty to
federal criminal health-care fraud charges
involving the payment of kickbacks for patient
referrals and medically unnecessary hospital
admissions, tests, and services.
 In September 2006, following a trial, U.S.
District Court Judge John Darrah entered a
judgment against Rogan for $64,259,032
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Who Gets Hurt
 331 hospital beds
 2002 Average 183 patients per
hospital bed
 607,702 potential victims – one
facility
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Trigger Points for Fraud
 Data Statistical Sampling of Occurrence
 Data – Volume of claims by provider
 Reconciliation of infusion claims with laboratory
tests, CMS-1500 Data, UB-92 Data
 Address association, vendor trending, billing
agent trending, supply trending
 Clinical data analysis
 Key Patient Data: ICD code and CPT
reconciliation, Admitting Diagnosis, POA codes
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Freeport doctor sentenced for health
care fraud 2009
 Dr. Robert L. Ignasiak Jr. was
sentenced today by Senior U.S.
District Judge Lacey A. Collier to
292 months in prison, fined $1
million, and ordered to pay an
additional $4,300 Special Monetary
Assessment.
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Freeport doctor sentenced for health
care fraud 2009
 Ignasiak was found guilty on Nov. 3, 2008, of
43 charges including: health care fraud;
dispensing controlled substances, including
fentanyl, hydrocodone, diazepam,
chlonazepam, morphine, and alprazolam, the
use of which resulted in the death of two
persons; and unlawfully dispensing controlled
substances, including oxycodone, morphine,
fentanyl, hydrocodone, alprazolam,
diazepam, clonazepam and carisoprodol
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Freeport doctor sentenced for health
care fraud 2009
 evidence that Ignasiak prescribed controlled
substances to patients knowing the patients
were addicted to the substances, misusing the
substances, or were "doctor shopping," and
were requesting additional quantities of
controlled substances for their drug habits.
 Ignasiak attracted patients from across the
Southeastern United States because of his
willingness to prescribe controlled substances
with little or no medical justification
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Freeport doctor sentenced for health
care fraud 2009
 nearly all of his patients were
prescribed controlled substances, even
though he claimed to be a family
practitioner with no specialty in pain
management or in psychiatric
medications.
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Who Gets Hurt?





Active Addict
Future Addicts
Family members of addicts
The patient – disability death
Lost resources for legitimate
patients
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79
Trigger Points:
 Data Statistical Sampling of Occurrence
 Data – Volume of claims by provider
 Reconciliation of infusion claims with
laboratory tests, CMS-1500 Data, UB-92
Data
 Address association, vendor trending, billing
agent trending, supply trending
 Clinical data analysis
 Key Patient Data: ICD code, CPT, Medication
reconciliation, and Admitting Diagnosis,
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'Humanitarian' gets prison term in
Medicaid fraud
 Melee Kermue, 32, pleaded guilty in October to a
scheme in which his Reynoldsburg-based healthcare business submitted an estimated 4,800
fraudulent claims to the Ohio Medicaid program.
 Must repay the $272,525 in claims as part of his
sentence
 He came to Ohio in 1997, earned an associate
degree and founded Hope Home Health Care Inc.,
which provided skilled nursing to Medicaid patients
in their homes.
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81
'Humanitarian' gets prison term in
Medicaid fraud
 Federal prosecutors said the company submitted
claims to Medicaid that included false names and
dates of service and claims for services provided by
hospitals, not in clients' homes.
 Kermue deserved leniency, his attorney, Jeremy
Dodgion, said, because he returned to the U.S. on
his own to face the charges and has lived as a
respected politician and humanitarian in Liberia. A
nonprofit organization he operated in the western
African nation provided housing for 450 people and
medical supplies to refugees
 Fraud for profit or philanthropy?
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82
Who Gets Hurt?
 2,725 – 3,633 Ohio Medicaid Patients
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AmeriChoice of Pennsylvania, Inc.
has agreed to pay $1.6 million
 Enter into a corporate integrity agreement
 Agreed to maintain a claims processing system
that will allow providers to query the status of
unsettled claims, to settle allegations by the
U.S. Attorney for the Eastern District of
Pennsylvania and the HHS OIG that the
company violated the False Claims Act.
 The settlement requires AmeriChoice to pay
95% of clean claims within thirty days of
receiving all necessary documentation to
process the claim.
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84
AmeriChoice of Pennsylvania, Inc.
has agreed to pay $1.6 million
 The government alleged that from September
1995 through June 1998, AmeriChoice did not
pay providers' health claims in a timely fashion
or did not pay them at all.
 They did not answer recipient call, altered CPT
codes, and other issues related to performance
guarantee data
 The complaint also alleged that the company did
not report claims processing data accurately to
regulators. AmeriChoice, previously known as
Healthcare Management Alternatives Inc.
85
85
Who Gets Hurt?
 The patient/beneficiary
 The integrity of the program
 Legitimate Providers
86
86
Trigger Points




Hot line beneficiary complaints
Provider complaints
Excessive denials
Performance Guarantee Reports
87
87
Who Gets Hurt?
 You
 303,824,640 US citizens
 832 potential victims on a daily basis
 6,706,993,152 World Population
 18,375 potential victim on a daily
basis
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Emerging Issues in Healthcare Fraud
Rebecca S. Busch, RN, MBA, CCM, CBM, CFE, CHS-III, FIALCP, FHFMA
CEO, Medical Business Associates
580 Oakmont Lane, Westmont IL 60559
www.medbizassociates.com [email protected]
630.789.9000
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